Hong Kong Sells Commercial Site In Mong Kok For US$602.5mil
HONG KONG – A commercial site in Mong Kok district that measures about 124,183 sq ft has been sold by the government to Sun Hung Kai Properties (SHKP), which submitted the highest bid of HK$4.729 billion (US$602.5 million), reported the South China Morning Post (SCMP) on Wednesday evening (1 March, SGT).
This marks Hong Kong’s first commercial land sale for 2023. However, the site was sold for less than 35 percent of the asset’s valuation in the low end ranging from HK$7.3 billion to HK$12 billion.
The sale of the land plot situated east of Sai Yee Street and north of Argyle Street came after city officials withdrew the tenders of three sites in more than a month due to insufficient bids amidst higher interest rates and a bearish market.
SHKP intends to construct a building with 1.52 million sq ft of space that would become the “second tallest landmark building in Kowloon” after the developer’s International Commercial Center, said SHKP’s Chairman & Managing Director Raymond Kwok Ping-luen
“It will become the largest landmark office cum shopping mall in Mong Kok, which is the core commercial, retail and tourism hub in Central Kowloon.”
Vincorn Consulting and Appraisal’s Managing Director Vincent Cheung, who appraised the commercial site at HK$10.6 billion, noted that there is already a bustling commercial complex above the railway station that is close to the sold land plot.
“The development of this tender site would help complete the connection via footbridges between the railway station and the western and eastern part of Mong Kok, which is also the traditional hub of the district.”
Meanwhile, Colliers estimated that the commercial land would sell for HK$7.3 billion and HK$12 billion, stated the property consultancy’s Head of valuation & advisory services, Hannah Jeong.
“It is a surprisingly low price, but understandable given that the developer needs to provide several pedestrian links and footbridges, a public transport terminus, and a handful of government facilities,” she explained.
In light of the building costs, Hannah reckons the commercial site’s total completion value ranges from HK$13.5 billion to HK$15 billion.